Due to COVID-19, the retail landscape has completely changed, leapfrogging eCommerce expectations by over two years. According to our data of over 4B eCommerce events, shipment volume in May increased by 49% YoY. Although eCommerce delivery has changed and shoppers have become more forgiving of delivery issues, one thing has not changed: Consumer expectations are still high, and many third-party carriers are working through peak season volume every day to help get packages delivered on time.
We interviewed Scot Goodwin from NSD to understand how carrier dynamics have shifted since the beginning of COVID-19, why carriers play such a large role in delivering on last mile customer expectations, and how retailers can maintain flexibility in order fulfillment and delivery.
The interview reads as follows:
Tell us a little bit about you and your role at NSD.
My name is Scot Goodwin, and I am the Senior Vice President of Sales at NSD. I have been married 22 years to my wife Clare and have 3 children. I enjoy spending time with the family, going to the beach, golfing, and anything involving football. I have been in transportation/logistics for 25 years and have spent the last 6 years at NSD. I manage our sales division and work with my team to develop our strategy for company growth. Our customers include the world’s largest retailers, and it has been exciting to work with them to develop solutions as their businesses continue to evolve.
How do you see retail and supplier roles shifting as consumer expectations continue to increase?
COVID-19 has caused a shift in buying modes. With more items being purchased online due to limited store access, the supplier is playing a greater role in the customer experience. In home delivery, the supplier must have the capacity to handle volume surges. Their technology has to be robust and flexible to accommodate changes in service levels and provide the retailer and the customer real-time status updates.
Let’s face it, today, the experience is not the interaction with the store associate, but the speed a carrier can deliver and the amount of information and options they can offer the consumer. The retailer is relying more than ever on its supplier’s ability to execute, communicate with the consumer, and create customer loyalty.
How do your customers think about creating a consistent last mile experience?
The world has changed over the last 60 days. The safety of consumers and delivery teams has moved to the top of the priority list. In-home delivery service is suspended. In this new environment, there are requirements for drivers wearing personal protective equipment and practicing social distancing.
Adding safety measures to the delivery process is critical, but the main elements of a consistent last mile delivery experience have not changed. It is still about how fast you can get the product to the consumer, keeping them updated and informed on the delivery, ensuring their order arrives defect-free, and providing a cost-effective solution. It is important for the retailer and carrier to continually re-evaluate and update the customer communication plan and SOW.
With all of the supply chain disruption related to COVID-19, what’s the number one thing that retailers should be aware of?
The companies that are having the most success right now are those organizations that have invested in technology, have strong eCommerce platforms, are diversified in their supplier and carrier base, and offer multiple methods for customers to receive goods. They also have clear and concise messaging to their customers throughout their order lifecycle.
Do you have any advice to combat this?
I know companies have limited IT investment dollars and resources, but where possible, these should be directed to support eCommerce. To be competitive, you will need to offer a variety of services like curbside pick-up, store-to-home, DC-to-home, and vendor direct options for consumers. They need to protect themselves from an unplanned store or facility closure. Also, they must develop clearly defined expectations and touchpoints with customers to proactively inform them of shipment status and potential delays or exceptions.
What should retailers do now to prepare for upcoming supply shortages?
Successful retailers are able to manage order fulfillment from stores, DC’s, and vendors. A good strategy would be to look at diversifying your vendor base and adding vendors with similar products. There should be a focus on adding as many products as possible for online ordering. Take advantage of the ability of your vendors to ship directly to the consumer and avoid extended customer delays due to shifting inventory.
What should retailers do to prepare for eventual re-opening?
I live in the greater NYC area and wanted to share my personal experience. When I go out shopping today, my safety and security have become a primary factor in my retailer choices. I have been to a store that limits the number of people allowed, has one-way aisles, floor markings for social distancing, wipes, and sanitizers available, as well as a contactless checkout. I have also been to one of their competitors that does not take the same level of safety precautions. When I have the option, I will patronize the stores that seem to make their customers’ and employees’ health a priority.
What things have changed that you think will stick around once this is all behind us?
Specific to home delivery, there will be new basic requirements for entering a customer’s home. Driver teams will have to wear masks and gloves, use hand sanitizer and wipes, offer the customer a no-contact POD, and need to confirm inside delivery during the scheduling process. I think these additional measures to protect our drivers and customers are here to stay.
Do you have any additional advice to share?
With the many unknowns regarding the impact of this virus on long term customer buying behavior and future economic strains, flexibility in order fulfillment and shipping is going to be extremely important for the retail industry. In the past, there was always the debate of the asset versus non-asset model.
I can tell you that the benefits of an asset-light model have served us well over the last several weeks. We have experienced significant volume increases while maintaining high levels of performance. I think retailers should be open to exploring all carrier options at this time to further prepare their supply chain solutions for what is currently happening as well as what we may see for holiday peak season this year.
NSD goes the extra mile in home delivery and is a Convey delivery partner. It is one of the fastest-growing logistics providers in the country and is a recognized leader in-home and business delivery solutions.
This ‘Ask Me Anything’ piece is the second blog in our partner series on supply chain resilience during and after the COVID-19 outbreak. Check out our first interview with Happy Returns, or check out the following pieces to learn more about supply chain disruption during this time:
- Our Parcel Network Pulse Dashboard pulls together our data of over 3 billion shipping events to help retailers identify where eCommerce fulfillment disruptions are happening.
- Watch our webinar, ‘The New Normal: Preparing Your Team For Peak Surges And Disruptions‘ to learn more about how you can diversify your network going into peak season.